Pinnacle Foods To Buy Iconic Wish-Bone Salad Dressings - Quick Facts

(RTTNews) - Pinnacle Foods (PF) has agreed to acquire the Wish-Bone salad dressings business from consumer goods giant Unilever Plc (UL, ULVR.L, UN), in a transaction that is expected to be immediately accretive to Pinnacle. The acquisition may be complete in late third quarter or early fourth-quarter 2013.

Wish-Boneis, a salad dressing brand, holds the #1 share position in the Italian segment of the category and the #3 position overall, according to Pinnacle Foods. The portfolio being acquired includes a broad range of liquid and dry-mix salad dressing flavors under the Wish-Bone and Western brand names. The brands have attractive margins and high free cash flow conversion and are expected to immediately enhance Pinnacle margins. Combined annual sales of the brands being acquired total about $190 million.

The deal value is $580 million, which would be funded with cash on hand and new debt. Given that the acquisition would be structured as an asset purchase, Pinnacle expects to realize some $125 million in tax benefits on a net present value basis.

Earnings per share accretion is likely to grow from a slight impact in 2013 to meaningful levels, beginning in 2014.